Economic growth is the foundation on which social and economic development rests. It helps to create jobs, generate income opportunities, and reduce poverty. When inclusive and sustained, growth can also promote political and social stability. It is therefore not surprising that it is at the top of most governments’ agendas. The Long Term Growth Model (LTGM) is a simple, transparent, and easy-to-use suite of tools to help policy makers assess what growth paths are feasible in their country, and how growth can be accelerated and sustained.
In this Policy Research Talk, World Bank economists Norman Loayza and Steven Pennings will summarize some of the key findings of the new book The Long Term Growth Model: Fundamentals, Extensions, and Applications. The talk will focus on three policy-relevant extensions to the LTGM framework and provide some applications that illustrate how to use them in practice. First, it will discuss how to model some of the determinants of Total Factor Productivity (TFP) growth, which is usually the most important determinant of long-run growth. Second, it will present some insights on the effect of higher public investment on growth. And finally, it will address the evolution of growth in resource-rich economies.
The monthly Policy Research Talks showcase the latest findings of the World Bank’s research department, challenge and contribute to the institution’s intellectual climate, and re-examine conventional wisdom in current development theories and practice. These talks facilitate a dialogue between researchers and operational staff and inform World Bank operations both globally and within partner countries. Read More »